This paper discusses the weakness of average years of schooling as a measure of human capital stock. We consider the example of Russia with its large-scale tertiary education and extensive student employment. Building on Lant Pritchett’s observation (Pritchett, L., 2013), we consider insufficient quality of education and relatively low demand for human capital as potential causes of the “earning while learning” expansion. While the latter is likely to reduce the pace of human capital accumulation, it nevertheless may leave average years of schooling untouched.

Tight budget constraints confronting the Russian authorities since the 2008 crisis urge the federal government to adjust the traditional system of its relations with the regions. The paper presents the case of the Republic of Tatarstan (RT) to analyze potential regions’ response to the emerging, considerably harsher “rules of the game.” Our main conclusion is that Tatarstan and other stronger Russian regions can take advantage of the current crisis for transitioning to a new economic development model resembling developmental states in Southeast Asia. This conclusion draws on analysis of the strategies recently implemented by the RT elites in response to external shocks the republic had to cope with in the post-Soviet period. Special focus is on identifying key factors that helped the republic successfully tackle the previous shocks, such as effective mechanisms of aligning the interests of the main regional elite groups and forming a consensus regarding the republican developmental priorities and the instruments for their attainment. The actual prospects for the formation of a developmental state model in Tatarstan will depend upon the success of the current regional elite in finding a consolidated response to new challenges facing the republic in recent years, as well as the constructiveness of the federal policy towards the regions. One of specific obstacles for Tatarstan to follow on Asian experience of catching up relates to a need to accelerate opening up of the regional economy for new, domestic and foreign, players.

In this paper we estimate whether monetary policy rules of Bank of Russia have changed during the recent past. Russia has moved towards inflation targeting throughout past years, and this is reflected in our empirical estimations. We start by estimating various monetary policy rules for Russia, concluding that a variant of Taylor rule depicts Bank of Russia’s monetary policy quite well during the past decade or so. Moreover, there clearly have been two breaks in the coefficients of the estimated monetary policy rule, possibly signifying shift towards traditional inflation targeting, but also the current recent economic turbulence.